The North American Securities Administrators Association (NASAA) has published its annual list of investor lists. NASAA is the lobbying-representative group that represents state securities regulators across the US as well as provincial regulators in Canada and Mexican regulators as well.
Topping the list for 2022 is crypto and digital assets.
Melanie Senter Lubin, NASAA President and Maryland Securities Commissioner, stated:
“The most common telltale sign of an investment scam is an offer of guaranteed high returns with no risk. It is important for investors to understand what they are investing in and with whom they are investing. Education and information are an investor’s best defense against investment fraud.”
The list is created by surveying their members with the following risks being the most cited challenges:
1. Investments tied to cryptocurrencies and digital assets,
2. Fraud offerings related to promissory notes,
3. Money scams offered through social media and internet investment offers and,
4. Financial schemes connected to Self-Directed Individual Retirement Accounts.
State securities regulators play an important role in securities fraud enforcement and frequently provide a first line of defense in regards to nefarious activity in the securities sector. In recent years, NASAA members have taken action against multiple, fraudulent ICOs and other schemes.
Long time Alabama securities regulator and NASAA Enforcement Section Committee Co-Chair Joseph P. Borg, added:
“By far, NASAA’s securities regulators revealed that investments related to cryptocurrencies and digital assets is our top investor threat. Stories of ‘crypto millionaires’ attracted some investors to try their hand at investing in cryptocurrencies or crypto-related investments this year, and with them, many stories of those who bet big and lost big began appearing, and they will continue to appear in 2022.”
Borg noted that private securities offerings do not have the same investor protection requirements as investments offered via public markets.
“Before you jump into the crypto craze, be mindful that cryptocurrencies and related financial products may be nothing more than public facing fronts for Ponzi schemes and other frauds,” said Enforcement Section Committee Vice-Chair Joseph Rotunda, Texas State Securities Board Enforcement Division Director. “Investments in cryptocurrency trading programs, interests in crypto mining pools, crypto depository accounts and securitized tokens should be seen for what they are: extremely risky speculation with a high risk of loss.”